Great. Thank you, everybody. Welcome to the Nexstar Fireside Chat at the Goldman Sachs Communications and Technology Conference. I have the privilege of introducing Perry Sook, Chairman and CEO at Nexstar Media Group. Alongside him is Lee Ann Gliha, who is the CFO of Nexstar. Perry founded Nexstar in 1996 and has over 40 years of professional experience in the television broadcasting industry. This is actually the first time Goldman Sachs has hosted the company at the conference since 2018, and a lot has happened since then. We are looking forward to hearing about that. In 2018, the company generated $2.8 billion in revenue versus $5.4 billion in 2024, almost doubling that revenue cadence, including through the acquisition of Tribune Media in 2019 and through organic growth. Now, with the help of expected regulatory relief, Nexstar is on track to significantly increase its scale again with the announced and proposed acquisition of Tegna, another television broadcaster, which, if the deal closes, would increase the scale of the company to over $8 billion with EBITDA of approximately $2.6 billion before synergies on a last eight quarters annualized basis through Q2 2025. This scale would make Nexstar even more relevant within the broader media and technology ecosystem and one of the most important broadcasters in the industry. My name is Mike Yang, and I cover media, cable, and telecom here at Goldman Sachs. We have about 35 minutes for today's presentation, inclusive of Q&A. First, thank you so much, Perry, and thank you so much, Lee Ann, for being here today. We really appreciate it. Thank you for having us. As we sit here at the conference, we are more aware than ever before about the impact of big technology, big tech, on the impact of the media landscape. We've seen all the big tech companies launch some sort of consumer video service, get involved with sports rights that have historically only aired in traditional TV. Could you talk a little bit about some of the big changes that are happening in the industry, including some of the regulatory changes that may be important for the sector and for Nexstar? Sure. I think that at this moment in time, we are at a break glass moment for local television, local journalism. Those are Chairman Brendan Carr's words, not mine, although I totally agree with his point of view in that our existential threat is big tech as it continues to move into, as you said, sports rights, local advertising, aggregating local content, and just becomes a much more pervasive part of every screen that we have. Yet the local television stations are, you know, and television station operators are limited to reaching 39% of the U.S. population. Everybody says, how did they come up with that number? How does that make any sense? The point is, it doesn't, right? I think that the Trump administration and Brendan Carr at the FCC and similar leadership at the DOJ has realized and acknowledged that these rules make no sense in today's environment. Furthermore, there is a demonstrated public interest in maintaining a free and independent press, which at the local market level is primarily now fallen to local television journalism. I don't think anyone wants their local news delivered by a chatbot of unknown origin and unknown, you know, fact-based aggregation of content. We think our thesis is that you need big companies, strong companies, to be able to attempt to compete on a level playing field with big tech, at least in the domestic U.S. That's the industrial logic behind Nexstar Media Group getting larger and becoming larger and acquiring Tegna to try and increase that opportunity to preserve local content and expand local content given the benefits of scale. Yeah. When you announced the deal, I was surprised at the company's willingness to kind of force the issue of FCC ownership caps right now. I agree with you that it's a completely antiquated rule. It doesn't really make sense just given all the competition in the broader media landscape. Maybe you can just talk about what gave you all the confidence that we would achieve this regulatory relief to get the proposed acquisition of Tegna through the finish line? Yeah, I'll take that. We would not have announced a transaction if we didn't feel confident that we could get it through the regulatory authorities. We have spent a tremendous amount of time in preparation for this over the years, and Perry in particular, as his role as the Chair of the NAB, in really laying the groundwork with these regulatory authorities that deregulation is needed. What we have seen with the Trump administration is really a willingness to pursue deregulation, to pursue a pro-deal environment. We feel like the door is open, and we're just kind of pushing on that open door to get this through. There are a couple of different things that we need to have happen, one of which is we need to have the national ownership cap lifted. What you have seen so far is Chairman Carr refresh the record on the prior NPRM that was put out with respect to the ownership cap. Those comments were due on August 22. There's opportunity now for him to take action with respect to eliminating that ownership cap. The other thing that we need in order to get the deal through is we need to be able to acquire two or own two of the top four rated television stations in a given market. That's called the local television ownership rule. We had the Eighth Circuit actually recently ruled that that rule that the FCC has was not really a valid rule, and they vacated it. The FCC then did make a comment in support of that ruling. The plan from this point forward is to look through a series of waivers that we could get for those markets where we would have those overlaps or those two of the top four rated television stations because it is well within the FCC's right to provide waivers with respect to that rule. We feel like there's a good plan and a good path forward with respect to getting this transaction done by those strategies. We really feel like the administration has been very supportive of the deregulatory environment that we're in today, and we're really just looking to meet that regulatory moment where it is. I mean, would it have been great to have a change in the rule and then do the deal? Yes. We also have seen that this is going in a certain direction, and we really would like to execute on that before people get distracted with midterm elections and the like. That was part of the calculus around this transaction. Great. Why don't we stay on the topic of Tegna and the transaction for a little bit? Obviously, a substantial strategic move. It'll expand Nexstar Media Group's reach to 80% of U.S. TV households, I believe. Could you elaborate on some of the specific market dynamics, competitive pressures that made Tegna an attractive target for you all? First and foremost, I think the companies are a lot alike. Similar balance sheet profile, similar legacy of providing local news to communities and, you know, as a service and high quality and accurate information. If you look at the two companies together, pro forma, we will produce 450,000 hours a year of local news. That is vastly more than any other company in the U.S. produces in terms of local information. We plan to increase that number over time with these combinations, which will allow us to add news to stations that didn't have the resources to be able to put on that kind of a product in major cities like Dallas and Houston and others. There is a public benefit to this combination, allowing a bigger company, a stronger company, to be able to fund local news development where a smaller company may not have had the wherewithal to do so. We put out a synergy number that we have a high degree of confidence in bringing two companies together, $300 million. That's based on a fairly exhaustive desk review that we have done within the limitations of what can be done with two public companies prior to the announcement of an acquisition. Lee Ann and her team have done a tremendous job there. We feel very confident in this, just as we've gone through this process many times before. Tribune, Media General, a total of 40 different deals since I launched the company in 1996. We feel we have a very well-worn playbook. We can execute on the synergies, achieve them. We have an integration plan that I think is very well thought out and put together. We plan to execute on that playbook here as we go forward. This was the biggest transaction bringing the highest dollar quantum of synergies. As we've said all along, we can reward our shareholders with a 20% accretion, basically just buying back our own stock. Any acquisition to risk capital and management time has to be substantially more accretive than that. This was one. It's also, you know, we didn't reach these conclusions on our own. The Tegna board considered all of their options to be a buyer or a seller and voted unanimously to endorse this transaction. I think you've got two companies of a similar mind, an actionable transaction in a timeframe that we think makes a lot of sense to, again, lead the industry toward the next era of consolidation. Yeah. Just following up on the $300 million of expected annual synergies, most of which I think happens within the first year post-closing, what are some of the key components of the synergies? What's the playbook? Is this retransmission rate convergence? Is this more programming costs? I'll put reverse comp in there as well, or more operational synergies? Maybe it's all of the above. Yeah, it really is all of the above. I think if you kind of look at our investor presentations and our past deals, the synergy playbook is really the same. It's really composed of sort of three or four different categories. The first category being net retrans synergies, that's just really the effect of our contracts. It is any in-market synergies that we might have from, in this transaction, one of the benefits of the transaction is that Tegna has 51 markets. We overlap with them in 35 of those 51 markets, so there's an opportunity for synergies within those markets. There's efficiencies just in general in how we operate our business versus how they may operate their business. Then there's corporate overhead, and I would call like hub-type synergies. We don't need to have two CFOs. We've got a back office for billing. Do we need to double that? Probably not. Those are the types of things that can also kind of come out of that synergy number. I think over time, we'll probably find more opportunities for synergies on other things that we haven't even thought about. These are the ones that are really underwritable, very calculable. I think over time, we'll look to consolidate locations that will potentially free up some real estate value and further reduce operating costs because we won't be paying property taxes and utilities and lawn mowing fees and things like that. That'll be a little bit longer dated in terms of the cost save plan. Great. Perry, I was wondering if I could go back to something that you said at the onset, which was really about broadcasting's role in the broader media ecosystem, which has obviously seen a tremendous amount of transformation, certainly over the last decade, even more if you look back further than that, with streaming competition and the like. Where does broadcast fit in when you think about consumers and advertisers and content owners with the kind of overhang of big tech and how they're kind of playing in the ecosystem? I would say first and foremost, look at the newspaper industry if you want to see what happens if you wait too long to deregulate. Right. That's, again, this concept of a break glass moment that Chairman Carr and the Trump administration, I think, endorses here. I think that if you look at what we do, and I've said this multiple times, this is the least sexy, most sticky part of the entire media ecosystem, right? We produce local content. That's our service. We help local businesses sell things. That's our commercial reason to exist. We do all of this in local markets around the country where our journalists and our salespeople live with the viewers and the advertisers that we do business with and have learned to be very good fiduciaries of their advertising dollars. You don't get a call center if you have a problem. You get to see somebody about that. We think of the local journalism we're providing as our essential service. It has also spawned our ability to develop NewsNation out of whole cloth that was a rerun cable network prior. There's a distinct public interest to what we do and a public service to what we do. There's really no other place that provides an equal level of participation in the local marketplaces from a local journalism perspective. Nexstar alone today has 5,500 journalists across the country. That's more than any other news organization, to the best of our knowledge, on the planet in terms of journalists in the U.S. We have an 1,800-person sales force calling on many, many tens of thousands of SMBs across the country. We're in results-based advertising. The guy standing next to the cash register or woman knows whether the advertising worked long before the agency reports back on the reach and frequency and all of that. Do they have more cash in the till on Saturday night when they close up than they did when they open Monday morning? That's performance advertising. That's the business we're in. That last mile connectivity is something that we have uniquely, I think, that's special in the local marketplaces in that our branded content, our branded station relationships are with the consumer and the business owner at the cash register, right? We have that ability to be that connective tissue. That is the most sticky part of the media ecosystem. We don't have red carpet premieres, but we'll go to the opening of a supermarket, a car dealership, a grocery store, a furniture store. It's a very retail relationship, but it's also a very durable relationship. That's the reason why we've chosen to invest primarily and almost exclusively into the local end of the entire media ecosystem. Right. Perry, you've talked in the past about the role of a local broadcaster, Nexstar, in addressing things like media bias, AI, misinformation. On the flip side, you are a leading local broadcaster. How do you balance what could be perceived as roles that may not have perfect concentric circles in terms of objectives, right? In terms of driving engagement and ad dollars and then being objective with news reporting. I think that, you know, we are, first and foremost, a journalistic organization. At the local level, again, you know, there is no opinion. There is no overt bias. Independent agencies have looked at this, you know, and rated our newscast, both at the local and at the national level with NewsNation, as high in enterprise reporting and accurate in terms of absent bias left or right. You know, NewsNation, for example, employs a rhetorician that was previously employed by the Vatican. You can imagine how every word, punctuation mark, is poured over by any statement made by the Vatican. Her full-time job is to review content before it goes on the air, some after it goes on the air, for hints of bias and unconscious bias by the words that are used. We take this responsibility very seriously. We happen to believe that the largest swim lane in America is the centrist swim lane, which is the center of opinion, center of the country, and, you know, where people agree on more things than they disagree on. I think that's most people in this country. That's the area where we think we're best at, again, given our local roots. What we will continue to try and provide is we call balls and strikes. We don't have any agenda other than that. That's the essential service we provide. I think ultimately over time, that could be what sets us apart. Right. The FCC has made some public statements around deregulation, you know, being an advocate for broadcaster consolidation. I was just wondering if you could talk a little bit about how you see the competitive landscape in broadcasting evolving. You know, what does this all look like in an end state? Sure. I don't know how far end state would go out, but, you know, five years from now, from an investment standpoint, I think there'll probably be two station groups that investors will care about or should care about. There may be others, but in terms of those that are interesting and meaningful, I think you may have two. Lee Ann and I think that the networks will tend to hold on to their owned and operated stations primarily as a source of cash if they don't see any higher value than that to fund other aspirations that they have. I look at our company, pro forma, for the acquisition. We'll have, depending on the measuring stick, but we'll likely have cash flow or EBITDA that is equal to or greater than Paramount and equal to or in the same neighborhood of Fox. That's a different neighborhood and different kind of discussion than some of the peer groups that have much smaller market cap to begin with in local television broadcasting. I think many of those will be absorbed over time by larger players. I think they're primarily family-owned, and I think the families will look at their future and generational wealth and what they want to do. I think they'll probably come to the conclusion that they should monetize their investments. I don't pretend to speak for any of them, but you asked what the end state looks like, and this is one man's opinion. I think you'll have stronger companies that can provide more resources and maintain credible local journalism, which I think this country depends on. I think that's the public interest in this continuing to happen because otherwise, with the counterparties we deal with, it's not a fair fight, right? Because market cap or just resources, it's a mismatch. I think this helps to level the playing field, which can benefit consumers and local communities, which is the whole reason we're doing this in the first place. Right. How does Nexstar strategically position all of its local news assets to compete against some of the national news networks? What you described in terms of on-the-ground reporting and all of the assets you have in each of your markets seems really intriguing to me. Obviously, what you guys are doing with NewsNation is a part of that, but maybe you can expand on that a little bit. I think the strength of what we do is that no one goes home at night to say, "I want to watch a Nexstar television station." They go home to watch, you know, KRON here in San Francisco, KTLA in Los Angeles, News8 in Tampa. No one at Nexstar says, "This is what you're going to do, and these are the," you know, I've never told anybody, you know, and no one in the organization, other than at the local management level, is telling anyone what to cover on any given day. There's no agenda there. It is to get it right and cover the most amount of news that you can to provide the most, the biggest service to our community. The flavor of what we cover in Burlington, Vermont is different than it is in San Diego, different in Portland, Maine, than it is in, you know, Tampa, Florida. We allow those decisions to be made at the local level as to what the tastes, opportunities, concerns are in the local marketplace, and our coverage should respect that. There is no one-size-fits-all, and I think that diversity of opinion and geography and community is a strength of our company. I think that's probably the best way to answer that. Great. Yeah. Maybe we can talk a little bit about The CW. You know, that broadcast network has made, I think, a really remarkable pivot towards sports and sports-related programming, which I think you have said makes up over 40% of viewing hours. You guys have done extensions for the PAC-12. You have ACC content. You know, how do you see The CW's role within the broader sports media landscape? You know, how do you think about your sports portfolio strategy overall? If you look at what we have done to date and where we have added the most value, it has been taking sports that were primarily distributed on cable or captive to that distribution universe and putting them on over-the-air broadcast stations through The CW network that have ubiquitous reach and reach those outside of the pay-TV universe. We are still playing moneyball as we continue to grow this network, if you will. We have the Xfinity Series on The CW, which is the Saturday race, not the Cup race on Sunday. The anecdote there is the Xfinity race is on The CW and its affiliate group of owned and operated stations every Saturday. People know where to find that, where, quite honestly, the Cup has gone from Fox to Amazon to NBC and Fox. If you look at the year-to-date numbers, the Xfinity audience in total is up about 15%, while the Cup race total audience is down about 15% as well. There is value in making it easy for the viewers to find what they're looking for. With auto racing, with ACC and all of that, we would love to continue to expand our portfolio. We had a request from our network sales department last week: could we please add more women's basketball in the first quarter because we have unmet advertiser demand. We are efforting with both the PAC-12 and the ACC to see if we can add additional games there. We are very opportunistic in terms of the rights. We are not in a position to outbid any established entity at this point in time. I will point out that Fox was in business as a network for eight years before they made a bid for the NFL. They had to grow into their sports portfolio as well. From our perspective, we are happy to talk to anybody that would be looking for superior distribution. Even there, we have folks on our air today that were offered more money by streamers, but they wanted to build the brand, wanted to be over the air, and realized how special that is and how scarce those opportunities are. NewsNation, you know, I feel like I could probably count on one or two hands the number of basic cable networks that are seeing growth in subscribers and viewership, and NewsNation is one of them. You know, could you talk a little bit about the NewsNation brand, the audience, programming initiatives that you're pursuing to grow that, and the outlook on affiliate fees and advertising within that network? Yeah. Yeah, I mean, I think NewsNation was created out of the old WGN America, which was part of Tribune, which we acquired in 2019. At the time, you know, we saw the opportunity to kind of move it from just a network that was entertainment-based to one that was news-based. If you look at just sort of the top 10 rated networks, perennially, it's the top four broadcast networks, but then it's also cable news networks. We saw that opportunity to really fill a hole that was in the cable news environment with being able to be really kind of the middle of the road, but entertaining type news programming. That's really been kind of the focus over time and really has what's been helpful in terms of growing that audience base. Great. Just celebrated our fifth anniversary on September 1, and we started with three hours a night in prime time, and now we're a 24/7 cable network fully distributed Monday through Sunday. Started with literally no audience, right? It was a startup from scratch programming service. We now are, our awareness is into the 40% range in terms of consumers. Among news viewers, it's in the mid-50%. From a standing start, programming to people that want facts, and if it's opinion, clearly labeled as opinion to hear both sides of the story, most of those people had left the cable news ecosystem because they said, "There's nothing here for me. It's either way right or way left." People yelling at each other, and I don't, that's not what I want to, you know, ingest. We've been building this audience from scratch. It's been very gratifying. Our audience numbers were up 67% year over year last month, and we were the fastest growing cable network, period, not just news, but of all cable networks. You're right, there were only a couple of handfuls that actually could demonstrate growth over the last 12 months. Often pleased, never satisfied, but the growth has been there, and we will continue to grow. Great. I wanted to ask a little bit about your spectrum holdings and plans for that. As a TV broadcaster, you guys obviously have a tremendous spectrum portfolio, some of which arguably is a little bit less utilized than it was. What are the opportunities for you to utilize some of that spectrum in the spirit of public service, and what are your plans there? This is one of the things that we're really excited about in terms of the future for the company longer term. We do have, you know, we cover 70% of the U.S., and it's about 2.6 billion megahertz pops. That's our spectrum on a standalone basis. What we've done is we've taken our spectrum and put it into a joint venture called Edge Beam Wireless, along with Gray and Sinclair and Scripps. We've got now sort of almost the whole industry talking with one voice. The plan here is that we have been able to really change the technology that we use to broadcast from what was a standard called ATSC 1.0 to the new standard, which is ATSC 3.0. What that does is it enables us to transmit our broadcast signal using less bandwidth. We can then utilize the remaining portion of the bandwidth for high-speed data transmission that we can lease to third parties and to really provide a very cost-effective way to deliver data. The reason, part of the reason that it is so cost-effective is that if you think about some of this other spectrum that's out there and all of the costs that have to go into developing, to building towers, to building out that whole infrastructure, we already have that. We already have towers across the entire country based on what we've got from our television broadcast business. We don't have to go and replicate that. We can be the low-cost provider with respect to that high-speed data transmission. What's happened so far is we've been able to really convert over television stations that cover over 50% of the population for us to that ATSC 3.0 signal. We are actively working with this Edge Beam Wireless joint venture to develop the business cases and to work with potential new customers for that spectrum. As we see the consumers migrate to television sets that can receive ATSC 3.0 or to acquire converters that can do that, we'll be able to move off of that 1.0 signal and move to 3.0 and really kind of monetize that over time. That's great. I'm very excited about it. Great. I was just wondering if I could ask a little bit about the state of the current advertising environment for you all. You know, national, local, certain specific verticals, like where are you seeing pockets of strength versus weakness? Yeah. Look, at the beginning of the part of this year, we had some curveballs thrown at us, and everyone was very concerned about what the potential impact of tariffs would be. The long and short of it is it wasn't as terrible as everyone thought it was going to be. It was nothing that sort of, no one fell off a cliff or anything. I think the benefit that we have from our advertising base is if you look at our overall advertising, about 60% of our advertising comes from services-based businesses versus goods-based businesses. Our largest services-based category is attorneys. We also do really well with like home repair and manufacturing, which are things that are not as impacted by potential tariffs. Those categories have been doing well. On the flip side, we've had some negative impact from auto, as we've seen that segment has been impacted by tariffs. It is our largest category, and that's provided a little bit of a headwind for us in terms of the advertising growth. So far, in the second quarter, we had our advertising for non-political advertising was down only about 2.5%, which we felt was a positive given this economic environment. Great. Perry, just to close things out, I was wondering if you could just tie it all together for us and talk about where you see the key priorities and strategic areas that you're focused on over the next 12 to 24 months. Obviously, we are working very feverishly to go through the regulatory process, obtain a regulatory approval for our transaction, and we'll be laser-focused on achieving those synergies and integrating the two entities into one company. That is first, that is job one. I think when we feel that's well under hand, we will begin to maybe consider what other M&A opportunities are out there, being mindful of leverage and cost of capital and actionable transactions at reasonable prices and all of those things. That's the same as it ever was. From an investor perspective, I think what begins to lay out in media is you'll have your streaming favorite, you'll have your networks' favorites, and you'll have one choice if you want to play the local media part of the ecosystem or cover the entire media ecosystem. That one choice will be Nexstar. I think it will be well capitalized. Hope it will be well run and will be the alternative for you, and that investors will benefit from an efficient deployment of capital across the three different elements of what we all consider media. Great. Perry, Lee Ann, it's been such a privilege to have you on stage with us here. Thank you so much for your time today. Thank you. Thank you.